What is the main goal of risk management in insurance?

The primary goal of risk management in insurance is to minimize potential financial losses to the insurer. This involves identifying, assessing, and mitigating risks that could lead to financial claims or liabilities. By effectively managing risks, insurance companies can maintain their financial stability, ensure they can meet their obligations to policyholders, and keep premiums at a competitive level.

Through various techniques such as underwriting, loss control, and reinsurance, insurers aim to reduce the likelihood and impact of losses, thereby protecting their financial interests. This strategic approach ensures that while risks cannot be completely eradicated, they can be managed in a way that minimizes their financial implications, allowing insurers to operate effectively in a competitive market.